Pediatrix Medical Group, Inc.
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 4, 2026
MD$31.29-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001193125-26-204993
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001193125-26-331513
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 58 previous paragraphs and 72 current paragraphs.
31 unchanged; 26 reworded; 7 added; 1 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Medicare and Medicaid Reform
Current report
In addition, attempts to limit federal and state spending continue on GHC Programs by limiting or reducing Medicare and Medicaid reimbursement for various services. Medicare pays physicians for their services using a formula that multiplies a standard dollar amount (called the conversion factor) by a number of units assigned to each service based on the time and complexity involved. Reducing the conversion factor therefore reduces what Medicare pays for every covered physician service across the board. In July 2026, CMS released the 2027 Medicare Physician Fee Schedule, which proposes to reduce the conversion factor by 1.19% for 2027, in part because a temporary payment increase that had been included in the 2026 fee schedule is set to expire.
Current report
Practice supplies and other operating expenses decreased $1.4 million, or 6.9%, to $19.2 million for the three months ended June 30, 2026, as compared to $20.6 million for the same period in 2025. The decrease was primarily attributable to lower practice supply, professional fees and other expenses at our existing units.
Current report
Net income was $39.8 million for the three months ended June 30, 2026, as compared to $39.3 million for the same period in 2025. Adjusted EBITDA was $76.4 million for the three months ended June 30, 2026, as compared to $73.2 million for the same period in 2025. The increase in our Adjusted EBITDA was primarily due to net favorable impacts from recent acquisitions, partially offset by a decrease in same-unit results due to higher expenses as compared to revenue growth.
Current report
Six Months Ended June 30, 2026 as Compared to Six Months Ended June 30, 2025
Current report
Practice salaries and benefits increased $21.3 million, or 3.2%, to $681.9 million for the six months ended June 30, 2026, as compared to $660.5 million for the same period in 2025. The increase of $21.3 million was primarily attributable to increases in clinical salaries and malpractice expense at our existing units.
Current report
Transformational and restructuring related expenses were $13.4 million for the six months ended June 30, 2026 as compared to $10.4 million for the same period in 2025. The expenses during 2026 primarily related to revenue cycle management transition activities. The expenses during 2025 primarily related to position eliminations across various shared services departments and revenue cycle management activities.
Removed paragraphs (1)
Previous report
Medicaid Reform
Reworded paragraphs (26)
Previous wording
Our operations and performance depend significantly on economic conditions. During the three months ended March 31, 2026, the percentage of our patient service revenue being reimbursed under government-sponsored or government-funded healthcare programs (“GHC Programs”) decreased slightly as compared to the three months ended March 31, 2025. However, we could experience shifts toward GHC Programs if changes occur in economic behaviors or population demographics within geographic locations in which we provide services, including an increase in unemployment and underemployment as well as losses of commercial health insurance. Payments received from GHC Programs are substantially less for equivalent services than payments received from commercial insurance payors. In addition, costs of managed care premiums and patient responsibility amounts continue to rise, and accordingly, we may experience lower net revenue resulting from increased bad debt due to patients’ inability to pay for certain services.
Current wording
Our operations and performance depend significantly on economic conditions. During the three months ended June 30, 2026, the percentage of our patient service revenue being reimbursed under government-sponsored or government-funded healthcare programs (“GHC Programs”) decreased as compared to the three months ended June 30, 2025. However, we could experience shifts toward GHC Programs if changes occur in economic behaviors or population demographics within geographic locations in which we provide services, including an increase in unemployment and underemployment as well as losses of commercial health insurance. Payments received from GHC Programs are substantially less for equivalent services than payments received from commercial insurance payors. In addition, costs of managed care premiums and patient responsibility amounts continue to rise, and accordingly, we may experience lower net revenue resulting from increased bad debt due to patients’ inability to pay for certain services.
Previous wording
For claims subject to the NSA, insurers are required to calculate the patient’s total cost-sharing amount pursuant to rules set forth in the NSA and its implementing regulations which, in some cases, can be calculated by reference to the applicable qualifying payment amount for the items or services received. The patient’s cost-sharing amount for out-of-network services covered by the NSA must be no more than the patient’s in-network cost-sharing amounts. Patient cost-sharing amounts for items and services subject to the NSA count toward the patient’s health plan deductible and out-of-pocket cost-sharing limits. For claims subject to the NSA, providers are generally not permitted to balance bill patients beyond this cost-sharing amount. An out-of-network provider is only permitted to bill a patient more than the cost-sharing amount allowed under the NSA for certain types of services if the provider satisfies all aspects of an informed consent process set forth in the NSA’s implementing regulations. Providers that violate these surprise billing prohibitions may be subject to enforcement actions by the Centers for Medicare and Medicaid Services, the U.S. Department of Labor, or by states, one or multiple of which may be tasked with investigating potential non-compliance as a result of patient complaints, as well as any state-specific penalties enforcement action and federal civil monetary penalties.
Current wording
For claims subject to the NSA, insurers are required to calculate the patient’s total cost-sharing amount pursuant to rules set forth in the NSA and its implementing regulations which, in some cases, can be calculated by reference to the applicable qualifying payment amount for the items or services received. The patient’s cost-sharing amount for out-of-network services covered by the NSA must be no more than the patient’s in-network cost-sharing amounts. Patient cost-sharing amounts for items and services subject to the NSA count toward the patient’s health plan deductible and out-of-pocket cost-sharing limits. For claims subject to the NSA, providers are generally not permitted to balance bill patients beyond this cost-sharing amount. An out-of-network provider is only permitted to bill a patient more than the cost-sharing amount allowed under the NSA for certain types of services if the provider satisfies all aspects of an informed consent process set forth in the NSA’s implementing regulations. Providers that violate these surprise billing prohibitions may be subject to enforcement actions by the Centers for Medicare and Medicaid Services ("CMS"), the U.S. Department of Labor, or by states, one or multiple of which may be tasked with investigating potential non-compliance as a result of patient complaints, as well as any state-specific penalties enforcement action and federal civil monetary penalties.
Previous wording
For claims subject to the NSA, including many emergency care services, out-of-network providers will be paid an initial amount determined by the plan; if a provider is not satisfied with the initial amount paid for the services, the provider can pursue recourse through an independent dispute resolution (“IDR”) process. The outcome of each IDR dispute is generally binding on both the provider and payor with respect to the particular claims at issue in that dispute but may not affect an insurer’s future offers of payment, though providers have had difficulty enforcing IDR awards against insurers. Accordingly, we cannot predict how these IDR results will compare to the rates that our affiliated physicians customarily receive for their services. These measures could limit the amount we can charge and recover for services we furnish where we have not contracted with the patient’s insurer, and therefore could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.
Current wording
For claims subject to the NSA, including many emergency care services, out-of-network providers will be paid an initial amount determined by the plan; if a provider is not satisfied with the initial amount paid for the services, the provider can pursue recourse through an independent dispute resolution (“IDR”) process. The outcome of each IDR dispute is generally binding on both the provider and payor with respect to the particular claims at issue in that dispute but may not affect an insurer’s future offers of payment. Providers have had difficulty enforcing IDR awards against insurers, as certain federal courts have held that the NSA does not provide a private right of action to compel payment, leaving enforcement primarily to the U.S. Department of Health and Human Services. Accordingly, we cannot predict how these IDR results will compare to the rates that our affiliated physicians customarily receive for their services. In addition, in May 2026, CMS finalized the most comprehensive revisions to the IDR process since its implementation. These measures could limit the amount we can charge and recover for services we furnish where we have not contracted with the patient’s insurer, and therefore could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.
Previous wording
The ACA also allows states to expand their Medicaid programs through federal payments that fund most of the cost of increasing the Medicaid eligibility income limit from a state’s historic eligibility levels to 133% of the federal poverty level. All of the states in which we operate, however, already cover children in the first year of life and pregnant women if their household income is at or below 133% of the federal poverty level. In recent years, members of Congress have introduced a number of proposals intended to reform the Medicaid program by cutting or expanding coverage and available benefits, and the program is in a state of flux. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, which reforms the Medicaid program by eliminating certain financial incentives for states that have expanded their Medicaid programs under the ACA, imposing work requirements on certain adult beneficiaries, and requiring states to increase patient cost-sharing amounts for certain services. The Congressional Budget Office has estimated that the One Big Beautiful Bill Act will cut federal spending on Medicaid and Children’s Health Insurance Program benefits by $1 trillion, due in part to eliminating at least 10.5 million people from the programs by 2034. We cannot predict with any assurance the ultimate effect of these reforms on reimbursements for our services.
Current wording
The ACA also allows states to expand their Medicaid programs through federal payments that fund most of the cost of increasing the Medicaid eligibility income limit from a state’s historic eligibility levels to 133% of the federal poverty level. All of the states in which we operate, however, already cover children in the first year of life and pregnant women if their household income is at or below 133% of the federal poverty level. In recent years, members of Congress have introduced a number of proposals intended to reform the Medicaid program by cutting or expanding coverage and available benefits, and the program is in a state of flux. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, which reforms the Medicaid program by eliminating certain financial incentives for states that have expanded their Medicaid programs under the ACA, imposing work requirements on certain adult beneficiaries, and requiring states to increase patient cost-sharing amounts for certain services. The Congressional Budget Office has estimated that the One Big Beautiful Bill Act will cut federal spending on Medicaid and Children’s Health Insurance Program benefits by $900 billion, due in part to eliminating millions of people from the programs by 2034. Additionally, several states are considering and pursuing changes to their Medicaid programs, such as requiring recipients to engage in employment or education activities as a condition of eligibility for most adults, disenrolling recipients for failure to pay a premium, or adjusting premium amounts based on income. We cannot predict with any assurance the ultimate effect of these reforms on reimbursements for our services.
Previous wording
For a reconciliation of each of Adjusted EBITDA and Adjusted EPS to the most directly comparable GAAP measures for the three months ended March 31, 2026 and 2025, refer to the tables below (in thousands, except per share data).
Current wording
For a reconciliation of each of Adjusted EBITDA and Adjusted EPS to the most directly comparable GAAP measures for the three and six months ended June 30, 2026 and 2025, refer to the tables below (in thousands, except per share data).
Previous wording
Our net revenue was $476.2 million for the three months ended March 31, 2026, as compared to $458.4 million for the same period in 2025. The increase in net revenue of $17.8 million, or 3.9%, was primarily attributable to an increase in same-unit revenue and to a lesser extent, non-same unit activity, primarily from the impact of recent acquisitions, net of dispositions. Same-units are those units at which we provided services for the entire current period and the entire comparable period. Same-unit net revenue increased by $12.1 million, or 2.8%. The increase in same-unit net revenue was comprised of an increase of $19.1 million, or 4.4%, from net reimbursement-related factors partially offset by $7.0 million, or 1.6%, related to patient service volumes. The net increase in revenue related to net reimbursement-related factors was primarily due to an increase in revenue resulting from improved collection activity, an increase in administrative fees from our hospital partners, increased patient acuity, primarily in neonatology, and a slightly favorable shift in payor mix. The decrease in revenue from patient service volumes was primarily related to our maternal-fetal medicine and neonatology services.
Current wording
Our net revenue was $487.8 million for the three months ended June 30, 2026, as compared to $468.8 million for the same period in 2025. The increase in net revenue of $19.0 million, or 4.0%, was primarily attributable to an increase in non-same unit activity, primarily from the impact of recent acquisitions, net of dispositions, and from same-unit revenue. Same-units are those units at which we provided services for the entire current period and the entire comparable period. Same-unit net revenue increased by $8.5 million, or 1.9%. The increase in same-unit net revenue was comprised of an increase of $18.1 million, or 4.0%, from net reimbursement-related factors, partially offset by a decrease of $9.6 million, or 2.1%, related to patient service volumes. The net increase in revenue related to net reimbursement-related factors was primarily due to an increase in revenue resulting from improved collection activity, a favorable shift in payor mix and increased patient acuity, primarily in neonatology. The decrease in revenue from patient service volumes was primarily related to our neonatology services.
Previous wording
Practice salaries and benefits increased $8.7 million, or 2.6%, to $345.7 million for the three months ended March 31, 2026, as compared to $337.0 million for the same period in 2025. The increase of $8.7 million was primarily attributable to an increase in clinical compensation expense at our existing units.
Current wording
Practice salaries and benefits increased $12.6 million, or 3.9%, to $336.1 million for the three months ended June 30, 2026, as compared to $323.5 million for the same period in 2025. The increase of $12.6 million was primarily attributable to increases in clinical salaries and malpractice expense at our existing units.
Previous wording
General and administrative expenses primarily include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically related to the day-to-day operations of our affiliated physician practices and services. General and administrative expenses were $60.3 million for the three months ended March 31, 2026, as compared to $58.6 million for the same period in 2025. The net increase of $1.7 million was primarily related to increases in incentive compensation expense based on financial results, partially offset by lower professional services and other expenses. General and administrative expenses as a percentage of net revenue was 12.7% for the three months ended March 31, 2026, as compared to 12.8% for the same period in 2025.
Current wording
General and administrative expenses primarily include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically related to the day-to-day operations of our affiliated physician practices and services. General and administrative expenses were $61.3 million for the three months ended June 30, 2026, as compared to $55.7 million for the same period in 2025. The net increase of $5.6 million was primarily related to increases in compensation expense, primarily from executive transition related costs. General and administrative expenses as a percentage of net revenue were 12.6% for the three months ended June 30, 2026, as compared to 11.9% for the same period in 2025.
Previous wording
Transformational and restructuring related expenses were $4.9 million for the three months ended March 31, 2026 as compared to $6.6 million for the same period in 2025. The expenses during 2026 primarily related to revenue cycle management transition activities.
Current wording
Transformational and restructuring related expenses were $8.5 million for the three months ended June 30, 2026 as compared to $3.8 million for the same period in 2025. The expenses during 2026 primarily related to revenue cycle management transition activities. The expenses in 2025 were primarily related to position eliminations and revenue cycle management transition activities.
Previous wording
Total non-operating expenses were $2.8 million for the three months ended March 31, 2026, as compared to $4.0 million for the same period in 2025. The net decrease in non-operating expenses was primarily related to a decrease in interest expense from modestly lower interest rates and borrowings.
Current wording
Total non-operating expenses were $2.9 million for the three months ended June 30, 2026, as compared to $4.9 million for the same period in 2025. The net decrease in non-operating expenses was primarily related to a decrease in interest expense from modestly lower interest rates and borrowings and an increase in interest income due to higher cash balances.
Previous wording
Our effective income tax rate (“tax rate”) was 23.9% for the three months ended March 31, 2026, as compared to 26.2% for the three months ended March 31, 2025. The tax rate for the three months ended March 31, 2026 and 2025 includes a net discrete tax benefit of $1.1 million and $0.2 million, respectively. After excluding discrete tax impacts during the three months ended March 31, 2026 and 2025, our tax rate was 26.8% for each period. We believe excluding discrete tax impacts provides a more comparable view of our tax rate.
Current wording
Our effective income tax rate (“tax rate”) was 26.2% for the three months ended June 30, 2026, as compared to 28.6% for the three months ended June 30, 2025. The tax rate for the three months ended June 30, 2026 and 2025 includes a net discrete tax benefit of $0.6 million and tax expense of $0.7 million, respectively. After excluding discrete tax impacts during the three months ended June 30, 2026 and 2025, our tax rate was 27.3% and 27.2%, respectively. We believe excluding discrete tax impacts provides a more comparable view of our tax rate.
Previous wording
Diluted net income per common and common equivalent share was $0.36 on weighted average shares outstanding of 83.1 million for the three months ended March 31, 2026, as compared to $0.24 on weighted average shares outstanding of 85.4 million for the same period in 2025. The decrease in our weighted average shares outstanding is primarily due to the impact of shares repurchased under our repurchase program, partially offset by issuances of restricted stock. Adjusted EPS was $0.44 for the three months ended March 31, 2026, as compared to $0.33 for the same period in 2025.
Current wording
Diluted net income per common and common equivalent share was $0.49 on weighted average shares outstanding of 81.4 million for the three months ended June 30, 2026, as compared to $0.46 on weighted average shares outstanding of 85.5 million for the same period in 2025. The decrease in our weighted average shares outstanding is primarily due to the impact of shares repurchased under our repurchase program, partially offset by issuances of restricted stock. Adjusted EPS was $0.63 for the three months ended June 30, 2026, as compared to $0.53 for the same period in 2025.
Previous wording
Practice supplies and other operating expenses decreased $1.2 million, or 6.4%, to $17.5 million for the three months ended March 31, 2026, as compared to $18.7 million for the same period in 2025. The decrease was primarily attributable to non-same unit activity, primarily resulting from practice dispositions.
Current wording
Practice supplies and other operating expenses decreased $2.6 million, or 6.6%, to $36.7 million for the six months ended June 30, 2026, as compared to $39.3 million for the same period in 2025. The decrease was primarily attributable to non-same unit activity, primarily resulting from practice dispositions and lower supply and other expenses at our existing units.
Previous wording
Depreciation and amortization expense was $6.1 million for the three months ended March 31, 2026, as compared to $5.3 million for the same period in 2025. The net increase of $0.8 million was primarily related to capital expenditures at our existing units and from amortization of intangible assets and capital expenditures from recent acquisitions.
Current wording
Depreciation and amortization expense was $11.9 million for the six months ended June 30, 2026, as compared to $10.6 million for the same period in 2025. The net increase of $1.3 million was primarily related to capital expenditures at our existing units and from capital expenditures and amortization of intangible assets from recent acquisitions.
Previous wording
Income from operations increased $9.6 million, or 29.8%, to $41.7 million for the three months ended March 31, 2026, as compared to $32.1 million for the same period in 2025. Our operating margin was 8.7% for the three months ended March 31, 2026, as compared to 7.0% for the same period in 2025. The increase in our operating margin was primarily due to acquisitions and favorable same-unit results, primarily related to revenue growth. Excluding transformational and restructuring related expenses, our income from operations was $46.6 million and $38.7 million, and our operating margin was 9.8% and 8.4% for the three months ended March 31, 2026 and 2025, respectively. We believe excluding the impacts from transformational and restructuring related activity provides a more comparable view of our operating income and operating margin.
Current wording
Income from operations increased $6.6 million, or 7.2%, to $98.6 million for the six months ended June 30, 2026, as compared to $92.0 million for the same period in 2025. Our operating margin was 10.2% for the six months ended June 30, 2026, as compared to 9.9% for the same period in 2025. The increase in our operating margin was primarily due to recent acquisitions. Excluding transformational and restructuring related expenses, our income from operations was $112.0 million and $102.4 million, and our operating margin was 11.6% and 11.0% for the six months ended June 30, 2026 and 2025, respectively. We believe excluding the impacts from transformational and restructuring related activity provides a more comparable view of our operating income and operating margin.
Previous wording
Net income was $29.6 million for the three months ended March 31, 2026, as compared to $20.7 million for the same period in 2025. Adjusted EBITDA was $58.2 million for the three months ended March 31, 2026, as compared to $49.2 million for the same period in 2025. The increase in our Adjusted EBITDA was primarily due to net favorable impacts from our same-unit results and recent acquisitions.
Current wording
Net income was $69.4 million for the six months ended June 30, 2026, as compared to $60.0 million for the same period in 2025. Adjusted EBITDA was $134.6 million for the six months ended June 30, 2026, as compared to $122.4 million for the same period in 2025. The increase in our Adjusted EBITDA was primarily due to net favorable impacts from recent acquisitions and from our same-unit results.
Previous wording
As of March 31, 2026, we had $205.8 million of cash and cash equivalents as compared to $375.2 million at December 31, 2025. Additionally, we had working capital of $144.4 million at March 31, 2026, a decrease of $160.2 million from working capital of $304.6 million at December 31, 2025. The net decrease in working capital is primarily due to an increase in the current portion of debt and finance lease liabilities from the Term A Loan (as defined below), which matures in February 2027.
Current wording
As of June 30, 2026, we had $288.9 million of cash and cash equivalents as compared to $375.2 million at December 31, 2025. Additionally, we had working capital of $158.6 million at June 30, 2026, a decrease of $146.0 million from working capital of $304.6 million at December 31, 2025. The net decrease in working capital is primarily due to an increase in the current portion of debt from the reclassification of the Term A Loan (as defined below), which matures in February 2027.
Previous wording
Cash used in operating, investing and financing activities from continuing operations is summarized as follows (in thousands):
Current wording
Cash (used in) provided by operating, investing and financing activities from continuing operations is summarized as follows (in thousands):
Previous wording
During the three months ended March 31, 2026, our net cash used in operating activities from continuing operations was $129.5 million, compared to $116.1 million for the same period in 2025. The net increase in cash used of $13.4 million was primarily due to an increase in cash used to fund working capital, primarily incentive compensation payments.
Current wording
During the six months ended June 30, 2026, our net cash used in operating activities from continuing operations was $3.2 million, compared to cash provided of $22.0 million for the same period in 2025. The net increase in cash used of $25.2 million was primarily due to an increase in cash used to fund working capital, primarily incentive compensation payments.
Previous wording
During the three months ended March 31, 2026, cash inflow from accounts receivable was $4.9 million, as compared to $17.5 million for the same period in 2025. The decrease in cash flow from accounts receivable for the three months ended March 31, 2026 as compared to the prior year period was primarily due to growth in revenue at existing units and the impact of acquisitions, partially offset by a decrease in days sales outstanding (“DSO”).
Current wording
During the six months ended June 30, 2026, cash inflow from accounts receivable was $2.1 million, as compared to $21.2 million for the same period in 2025. The decrease in cash flow from accounts receivable for the six months ended June 30, 2026 as compared to the prior year period was primarily due to growth in revenue at existing units and the impact of acquisitions, partially offset by a decrease in days sales outstanding (“DSO”).
Previous wording
DSO is one of the key factors that we use to evaluate the condition of our accounts receivable and the related allowances for contractual adjustments and uncollectibles. DSO reflects the timeliness of cash collections on billed revenue and the level of reserves on outstanding accounts receivable. Our DSO was 42.5 days at March 31, 2026 as compared to 42.8 days at December 31, 2025 and 47.6 days at March 31, 2025. The decrease in our DSO for both periods was primarily related to improved cash collections at our existing units.
Current wording
DSO is one of the key factors that we use to evaluate the condition of our accounts receivable and the related allowances for contractual adjustments and uncollectibles. DSO reflects the timeliness of cash collections on billed revenue and the level of reserves on outstanding accounts receivable. Our DSO was 42.5 days at June 30, 2026 as compared to 42.8 days at December 31, 2025 and 46.4 days at June 30, 2025. The decrease in our DSO for both periods was primarily related to improved cash collections at our existing units.
Previous wording
During the three months ended March 31, 2026, our net cash used in investing activities of $12.0 million consisted of acquisition payments of $7.0 million and capital expenditures of $6.2 million, partially offset by net proceeds from maturities of investments of $0.7 million.
Current wording
During the six months ended June 30, 2026, our net cash used in investing activities of $6.0 million consisted of capital expenditures of $7.6 million and acquisition payments of $7.0 million, partially offset by net proceeds from maturities of investments of $8.1 million.
Previous wording
During the three months ended March 31, 2026, our net cash used in financing activities of $27.6 million consisted primarily of stock repurchases of $21.5 million and payments on our Term A Loan of $6.3 million.
Current wording
During the six months ended June 30, 2026, our net cash used in financing activities of $75.9 million consisted primarily of stock repurchases of $64.2 million and payments on our Term A Loan of $12.5 million.
Previous wording
At March 31, 2026, we had an outstanding principal balance on the Amended Credit Agreement of $190.6 million, composed of the Term A Loan. There was no balance outstanding under the Revolving Credit Line. We had $450.0 million available on the Revolving Credit Line at March 31, 2026.
Current wording
At June 30, 2026, we had an outstanding principal balance on the Amended Credit Agreement of $184.4 million, composed of the Term A Loan. There was no balance outstanding under the Revolving Credit Line. We had $450.0 million available on the Revolving Credit Line at June 30, 2026.
Previous wording
We maintain professional liability insurance policies with third-party insurers, subject to self-insured retention, exclusions and other restrictions. We self-insure our liabilities to pay self-insured retention amounts under our professional liability insurance coverage through a wholly owned captive insurance subsidiary. We record liabilities for self-insured amounts and claims incurred but not reported based on an actuarial valuation using historical loss information, claim emergence patterns and various actuarial assumptions. Our total liability related to professional liability risks at March 31, 2026 was $270.9 million, of which $34.0 million is classified as a current liability within accounts payable and accrued expenses in the Consolidated Balance Sheet. In addition, there is a corresponding insurance receivable of $19.2 million recorded as a component of other assets for certain professional liability claims that are covered by insurance policies.
Current wording
We maintain professional liability insurance policies with third-party insurers, subject to self-insured retention, exclusions and other restrictions. We self-insure our liabilities to pay self-insured retention amounts under our professional liability insurance coverage through a wholly owned captive insurance subsidiary. We record liabilities for self-insured amounts and claims incurred but not reported based on an actuarial valuation using historical loss information, claim emergence patterns and various actuarial assumptions. Our total liability related to professional liability risks at June 30, 2026 was $271.1 million, of which $35.9 million is classified as a current liability within accounts payable and accrued expenses in the Consolidated Balance Sheet. In addition, there is a corresponding insurance receivable of $18.9 million recorded as a component of other assets for certain professional liability claims that are covered by insurance policies.
Previous wording
Certain information included or incorporated by reference in this Quarterly Report may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, future impacts of legal, regulatory, political and macroeconomic developments and all statements, other than statements of historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. These statements are often characterized by terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions, and are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements in this Quarterly Report are made as of the date hereof, and we undertake no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements include the following: the impact of the Company’s practice portfolio management plans and whether the Company is able to achieve the expected favorable impact to Adjusted EBITDA therefrom, the effects of economic conditions on our business; the effects of the Medicare Access and CHIP Reauthorization Act of 2015, the ACA, the One Big Beautiful Bill Act and potential additional healthcare reform; our relationships with government-sponsored or funded healthcare programs and with managed care organizations and commercial health insurance payors; the impact of state budgetary constraints and uncertainty over the future of Medicaid; the impact of surprise billing legislation; our transition to a hybrid revenue cycle management model; the timing and contribution of future acquisitions or organic growth initiatives; our ability to comply with the terms of our debt financing arrangements and our ability to replace, refinance or extend our current debt financing arrangements; the effects of our transformation initiatives, including our renewed focus, and growth strategy for, our hospital based and maternal fetal businesses; and other risks and uncertainties set forth under Part I, Item 1A. Risk Factors, of the 2025 Form 10-K as well as other risks and uncertainties se…
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Current wording
Certain information included or incorporated by reference in this Quarterly Report may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, future impacts of legal, regulatory, political and macroeconomic developments and all statements, other than statements of historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. These statements are often characterized by terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions, and are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements in this Quarterly Report are made as of the date hereof, and we undertake no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements include the following: the impact of the Company’s practice portfolio management plans and whether the Company is able to achieve the expected favorable impact to Adjusted EBITDA therefrom, the effects of economic conditions on our business, including a slowdown of economic growth, economic downturns, inflationary pressures, elevated unemployment levels and sluggish or uneven economic recovery; the effects of the Medicare Access and CHIP Reauthorization Act of 2015, the ACA, the One Big Beautiful Bill Act and potential additional healthcare reform; our relationships with government-sponsored or funded healthcare programs and with managed care organizations and commercial health insurance payors and any shifts in the Company’s payor mix; the impact of state budgetary constraints and uncertainty over the future of Medicaid; the impact of surprise billing legislation; our transition to a hybrid revenue cycle management model; the timing and contribution of future acquisitions or organic growth initiatives; our ability to comply with the terms of our debt financing arrangements and our ability to replace, refinance or extend our current debt financing arrangements; the effects of our transformation initiatives, including our renewed focus, and growth strategy for…
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Current report — wording carried from elsewhere
A blended tax rate of 25% was used to calculate the tax effects of the adjustments for the six months ended June 30, 2026 and 2025.
Current report — wording carried from elsewhere
Depreciation and amortization expense was $5.8 million for the three months ended June 30, 2026, as compared to $5.3 million for the same period in 2025. The net increase of $0.5 million was primarily related to capital expenditures and amortization of intangible assets from recent acquisitions.
Current report — wording carried from elsewhere
Income from operations decreased $3.0 million, or 4.9%, to $56.9 million for the three months ended June 30, 2026, as compared to $59.9 million for the same period in 2025. Our operating margin was 11.7% for the three months ended June 30, 2026, as compared to 12.8% for the same period in 2025. The decrease in our operating margin was primarily due to unfavorable impacts in our same-unit results, primarily from higher operating expenses, partially offset by favorable impacts from recent acquisitions. Excluding transformational and restructuring related expenses, our income from operations was $65.4 million and $63.7 million, and our operating margin was 13.4% and 13.6% for the three months ended June 30, 2026 and 2025, respectively. We believe excluding the impacts from transformational and restructuring related activity provides a more comparable view of our operating income and operating margin.
Current report — wording carried from elsewhere
Our net revenue was $964.0 million for the six months ended June 30, 2026, as compared to $927.2 million for the same period in 2025. The increase in net revenue of $36.8 million, or 4.0%, was primarily attributable to an increase in same-unit revenue and non-same unit activity, primarily from the impact of recent acquisitions, net of dispositions. Same-units are those units at which we provided services for the entire current period and the entire comparable period. Same-unit net revenue increased by $20.1 million, or 2.3%. The increase in same-unit net revenue was comprised of an increase of $37.0 million, or 4.2%, from net reimbursement-related factors partially offset by a decrease of $16.9 million, or 1.9%, related to patient service volumes. The net increase in revenue related to net reimbursement-related factors was primarily due to an increase in revenue resulting from improved collection activity, a favorable shift in payor mix, increased patient acuity, primarily in neonatology, and an increase in administrative fees from our hospital partners. The decrease in revenue from patient service volumes was related to decreases across all our service lines.
Current report — wording carried from elsewhere
General and administrative expenses primarily include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically identifiable to the day-to-day operations of our affiliated physician practices and services. General and administrative expenses were $121.6 million for the six months ended June 30, 2026, as compared to $114.3 million for the same period in 2025. The net increase of $7.3 million was primarily related to increases in compensation expense, primarily from executive transition related costs. General and administrative expenses as a percentage of net revenue were 12.6% for the six months ended June 30, 2026, as compared to 12.3% for the same period in 2025.
Current report — wording carried from elsewhere
Total non-operating expenses were $5.7 million for the six months ended June 30, 2026, as compared to $8.9 million for the same period in 2025. The net decrease in non-operating expenses was primarily related to a decrease in interest expense from modestly lower interest rates and borrowings and an increase in interest income due to higher cash balances.
Current report — wording carried from elsewhere
Our effective income tax rate (“tax rate”) was 25.2% for the six months ended June 30, 2026 as compared to 27.8% for the six months ended June 30, 2025. The tax rate for the six months ended June 30, 2026 and 2025 includes a net discrete tax benefit of $1.7 million and tax expense of $0.6 million, respectively. After excluding discrete tax impacts during the six months ended June 30, 2026 and 2025, our tax rate was 27.1% for each period. We believe excluding discrete tax impacts provides a more comparable view of our tax rate.
Current report — wording carried from elsewhere
Diluted net income per common and common equivalent share was $0.85 on weighted average shares outstanding of 82.0 million for the six months ended June 30, 2026, as compared to $0.70 on weighted average shares outstanding of 85.5 million for the same period in 2025. The decrease in our weighted average shares outstanding is primarily due to the impact of shares repurchased under our repurchase program, partially offset by issuances of restricted stock. Adjusted EPS was $1.07 for the six months ended June 30, 2026, as compared to $0.87 for the same period in 2025.